SIP Calculator — Mutual Fund Returns

How to Use the SIP Calculator

Enter three values to calculate your SIP projection:

• Monthly SIP Amount (₹): The fixed amount you plan to invest every month. Even ₹500/month makes a significant difference over long periods due to compounding.
• Expected Annual Return (%): The annualised return rate you expect from your mutual fund. For conservative planning, use 10–11% for diversified equity funds. For debt funds, use 6–8%.
• Investment Period (years): How long you plan to keep investing. The longer the period, the more powerful the compounding effect.

The calculator shows your projected maturity value, total amount invested, estimated returns earned, and wealth ratio. The growth chart below plots the portfolio value vs invested capital month by month — revealing how compounding accelerates in the later years of your investment.

Important: SIP return projections assume a constant return rate. Actual mutual fund returns are market-linked and variable. Past performance does not guarantee future results. This tool is for planning purposes only.

SIP Return Formula

This calculator uses the Future Value of Annuity Due formula, which assumes each monthly instalment earns returns from the moment it is invested:

FV = P × ((1 + r)ⁿ − 1) ÷ r × (1 + r)

Where:

• FV = Future Value (maturity amount)
• P = Monthly SIP amount (₹)
• r = Monthly return rate = Annual rate ÷ 12 ÷ 100
• n = Number of months (years × 12)

The (1 + r) multiplier at the end reflects "annuity due" — the assumption that each SIP instalment is invested at the beginning of the month and thus earns one extra month of returns compared to an ordinary annuity. Most SIP platforms in India invest at the beginning of each month, making this the more accurate formula for real-world SIP projections.

SIP Calculation Example

Suppose you invest ₹10,000 per month in an equity mutual fund for 15 years at an assumed annual return of 12%.

• Monthly rate r = 12 ÷ 12 ÷ 100 = 0.01
• n = 15 × 12 = 180 months
• FV = 10,000 × ((1.01)¹⁸⁰ − 1) ÷ 0.01 × 1.01
• Projected Portfolio Value ≈ ₹50,45,760
• Total Invested = 10,000 × 180 = ₹18,00,000
• Estimated Returns = ₹50,45,760 − ₹18,00,000 = ₹32,45,760
• Wealth Ratio ≈ 2.80x

Your ₹18 lakh invested over 15 years grows to over ₹50 lakh — nearly 3× your investment — purely through the power of compounding. Extending the same SIP to 20 years at the same rate pushes the portfolio past ₹99 lakh, illustrating why starting early is the single most important SIP decision.

Frequently Asked Questions

What is SIP in mutual funds?

SIP (Systematic Investment Plan) is a disciplined investing method where you commit a fixed amount to a mutual fund every month — similar to a recurring deposit but in equity or debt markets. SIP enables rupee cost averaging: you automatically buy more units when markets are down (at lower NAV) and fewer when markets are up. Over time, this averages out your purchase cost and reduces the impact of market timing on your returns.

How is SIP return calculated?

SIP returns are calculated using the Future Value of Annuity Due formula: FV = P × ((1 + r)ⁿ − 1) ÷ r × (1 + r). Here P is your monthly SIP amount, r is the monthly return rate (annual rate ÷ 12 ÷ 100), and n is the total number of monthly instalments. This formula assumes monthly compounding — consistent with how Indian mutual funds price NAV daily and credit returns.

What is a good SIP return rate to assume?

Diversified large-cap Indian equity mutual funds have historically delivered 10–13% annualised returns over 10+ year periods. Mid-cap and small-cap funds have delivered higher returns but with higher volatility and drawdowns. For conservative financial planning, assuming 10–11% for equity SIPs over a 10+ year horizon is reasonable. For debt fund SIPs (lower risk), assume 6–8%. Always use a conservative estimate for planning — actual returns will vary and are not guaranteed.

What is wealth ratio in SIP?

Wealth ratio is the multiple by which your total investment has grown. It's calculated as: Maturity Value ÷ Total Invested Amount. A wealth ratio of 3x means every rupee you invested is now worth ₹3. For a 20-year SIP at 12%, the wealth ratio exceeds 4x — meaning your portfolio is more than 4 times the money you actually put in, with the rest being pure compounding returns.

Is SIP better than FD for long-term goals?

For goals that are 7 or more years away, equity SIPs have historically outperformed fixed deposits in India by a wide margin. A 10-year FD at 7% vs a 10-year equity SIP at 12% results in dramatically different outcomes. However, FD returns are guaranteed and not subject to market risk, while SIP returns depend on market performance and can be negative in the short term. If you cannot tolerate the possibility of negative annual returns in any given year, stick to FDs or hybrid debt-oriented funds. For retirement and long-term wealth creation, a mix of both is often recommended by advisors.

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